William Moyes, chairman of the Independent Regulator of NHS Foundation Trusts, said: "This group includes some of our largest and most prestigious hospitals and represents a significant expansion of foundation trust status.

"There are now 20 NHS Foundation Trusts, representing around 15% by turnover of the acute trust hospitals in England, operating with autonomy, delivering
national health priorities but with greater accountability to local needs."

However, he said the Nuffield centre could not be given foundation status as there were question marks about its long-term viability in a new era of payment by results - raising fears about how well specialised units will cope in the future.

Costs at the Nuffield unit at 22% above the national average, and managers are concerned that the new NHS tariff - which stipulates how much can be charged per operation - does not reflect the extra complexity of its workload.

A decision on whether to grant foundation status to two further applicants - Calderdale and Huddersfield NHS Trust and King's College Hospital NHS Trust, London - has also been deferred by the regulator.

The 10 new NHS Foundation Trusts treat around 3.9 million patients each year, employ around 58,000 staff and have a combined turnover of £2.8bn. All have three stars under the government's rating system.

Peter Dixon, University College London Hospitals NHS Trust chairman, said: "I see foundation status offering us unique opportunities to work with our members and our local community to decide how we can provide top quality patient care, excellent education and world class research."

Opposition

However, Liberal Democrat health spokesman Paul Burstow said: "The seeds of a two-tier
NHS are being sown by this fresh wave of foundation trusts.

"The evidence is that the first wave of foundation hospitals are not involving or exciting local people. This is a failed exercise in democratising the NHS.

"More foundation trusts will do nothing to cut the red tape that is tying the hands of doctors and nurses, preventing them from getting on with the job of treating patients.

"A foundation trust's limited freedoms are earned at a price. It's about hitting Whitehall targets, achieving the star rating, and going through the hoops that ministers set."

In contrast, Andrew Lansley, for the Tories, said the government was "missing a golden opportunity".

"They are only offering foundation status to a few hospitals and they have watered down their freedoms almost to the point that they are meaningless.

"Hospitals need real freedoms to be able to respond to patients' needs, otherwise healthcare standards will not rise.

"Even after today's announcement, only 20 of the 289 NHS Trusts have been awarded foundation status.

"As a result, the great majority of doctors, nurses and patients will not even enjoy the limited benefits of the government's foundation hospitals."